Outsourced labor on Production order

I have a client who outsources the labor for one BOM that they produce and we need to record the amount of that labor when completed the production.  What is the best way to handle this?

Check this WIKI that explains How to include labour cost in a BOM
[https://wiki.sdn.sap.com/wiki/display/B1/Howtoincludelabourcostina+BOM.]

Similar Messages

  • Functional module for production order operation standard values

    Hi,
    Is there any functional module/BAPI available where I can get the 'Standard Valuse' (Setup/Machine/Labor) from production order operations directly?
    Regards,

    Hi Caetano,
    Thank you for your reply.
    I checked suggested BAPI BAPI_PRODORD_GET_DETAIL, it gives me the operation details like control key, Activity name (like KMCH, KMOD) but not its standard values (values for: Setup/Machine/Labor).
    Could you please check and confirm?
    The FM: PM_ORDER_DATA_READ gives me all details but as name start with PM, I am not sure if its only related to 'Plant maintenance' orders and if its ok to use this FM for PP production orders.
    Please suggest.
    Regards,

  • Labor Confirmations in production orders

    Hi All,
    We have a requirement to use catts to get the labor confirmations thru cats. But however we need to prepare a document which highlights the imporatnce of the labor confirmations in production orders.
    Can any one help me in this regard.
    Hope the question is clear.
    Reg Sam

    Hi..
    you can do Labor Hrs confirmation via production order for that you need to some settings
    1. Go to your work center and set up a Standard value key as Labor and put rule as " should be entered"
    2. use the above work center in your routing
    3. Indicate Std Hrs against labor activity type .
    4. Use this routing in your production order , then while confirmation of production order it will ask you to indicate labor Hrs against each Activity type.
    I hope this will serve your purpose.
    Thanks
    sekhar

  • Outsource partial qty of the oepration at production order

    Hi, there,
    I am currently working on a mechanical industry project. The customer may outsource partial  quantity of an operation due to capacity limit. That means one operation will be splitted into in-house production and external processing. I try to keep this process in the same production order due to production management concern. However, since oepration qty can't be changed, user will post a final confirmation to original operation to close the in-house production operation. And user will insert an external processing operation right after the original operation. My original idea is to convert the partial qty of PR generated by production order into purhcase order and then close the rest of PR. But I found out it's impossible to do anything on PR Qty except of blocking it. Does anyone ever
    have experience on this kind of requirement? Any input is welcome.Thanks in advance.
    Regards,
    Nancy

    Hi,
    1. For your order type PP01in opl8 tcode  in the controlling tab page set the cost collector indicator and default rule as Periodic settlement PP2.
    2.create info record for vendor.
    3.create product collector.(KKF6N)
    4. create production order and release .
    5.Goto operation  overview.select the operation for which you are going to outsource.
    6.choose function and split order and enter the outsource qty.
    7. Enter the order type and execute.
    8. Now your production order will be two .
    9.  Now choose the second order and goto operation oveview and select the operation and change the control key as PP02 and enter the purchasing details in the External operation view and release the operation and save.
    10.Now in the same tab PR will be created and convert it to PO and the external processing of operation begins and process
    is as usual.
    Regards,
    nandha

  • Production Order Settlement to GL by Labor ,Material,Ovhd,etc

    Our client would like to settle Cost Collectors and Discrete Orders, make to stock, to the GL by Cost Element Category.   The goal is to definitely have the variance account by cost element category. They may also want to have the Delivery to Stock COS account and settlment offset by cost element category. 
    I am beginning to evaluate alternatives.
    Has anyone done this before and what methods di you follow.
    Thank you,
    Jeffrey Webber
    [email protected]

    Dear Sadasivan,
    Will you explain in details, we have gone through the suggested path, where there is only two defaul rules
    PP1 - Production Full Mat. Settlement
    PP2- Production Periodic Settlement
    Actually we want to settle the production order variance as a financial variance through cost center, we don't want to settle this variance to the materail. Currently while doing the settlement, system posting the journal entry as
    Inventory Account   Dr.
      To COGM               Cr.
    We want the accounting entry as
    Price Variance       Dr.
       To COGM

  • Posting to Production Order Field during WIP Calc in Classic Ledger FI/PCA

    During our weekly Work In Process Calculation job (SAP Transaction KKAO) the following journal entry posts correctly per our company's SAP configuration:
    Debit/Credit Work In Process Change (Income Statement)
    Debit/Credit Work in Process Inventory (Balance Sheet)
    When the entry posts in the Financial Accounting and Profit Center Accounting Modules within the Classic Ledger, the Order field (BSEG-AUFNR, GLPCA-AUFNR) is not being populated with the Production Order number.  Instead it is going into a Text field.  An example of the current behavior is below.
    Itm PK Account    Account short text   Amount Text
      1 40 530000     WIP Change                9.59  ORD 12345678
      2 50 132000     WORK IN PROCESS    9.59- ORD 12345678
    The other Production Order transactions such as labor confirmations and finished good deliveries populate the aforementioned Order fields and have no Text entry.
    I would like the WIP calculation transaction to populate the Order fields in the Financial Accounting and Profit Center Accounting Postings.  How can I make this happen within the SAP configuration?
    Thanks in advance for your reply.
    Roman

    Hi,
    old PCA report painter reports can be migrated to NewGL reports under certain circumstances (see SAPNET note 1555535 for details).
    As the NewGL PC reporting bases on the data available in the new GL tables FAGLFLEX* I think that you will miss some infos in NewGL PC reporting compared to infos available in classic PCA reporting (eg object type / object class).
    Nevertheless it is possible to add fields toFAGLFLEX* but I doubt that this will be helpful in your case.
    BR Christian

  • How to change operation dates in Production Order /Capacity Leveling

    Dear Experts ,
    We are using ECC 5.0 .In production order , scheduling happing as Backward  based on the Sales Order Delivery Date .I am doing the following :
    1.Demand as Sales Order with Delievery date : 20.03.2010
    2.Running MRP with Lead Time Scheduling -2  in md02 and converting the Planned Order to Production Order .
    4.Production Order have following dates :
             Basic Finsish Date : 21.03.2010
             Basic Start : the day Pl.Or--Pr.Ord
             Schedule Start : 15.03.2010
             Schedule Finsish : 17.03.2010
            Schedule Release : 13.03.2010
    5.In schedueling margin key :  Float Before Production : 3    , FAP : 3 , Release Period : 2
    6.In material master : Work Scheduling View : Setup : 3 days , Processing : 4 ,Interoperation : 2 for one Base Qty 1
    7.In operation : Op1  : Start Date  : 15.03.2010    Finish Date: 15.03.2010
                             Op2 : Start Date : 16.03.2010      Finish Date : 17.03.2010
                             Op2 : Start Date : 17.03.2010      FD : 17.03.2010
    Question :
    1.How to change the Operation dates  in Production Order Operation over view screen ? Today,  operation over view screen , Start date and Finsih Date  of individual operation are not changable with in Production Basic Start /BF date  or beyond .It is only changing based on the Standard Value : Labor
    2.How to change/re-schedule operation dates d in CM21 (Graphical view -Work Center Capacity load as per   Production Order and Operation combination ) based on capacity availale in advance dates? I am using  Time Profile : SAPSFCZ002 -SFC Graph midterm-3 motnhs and Planning  ,
    How to solve this above issue in scheduling operation and capacity distribution .
    Regards
    JH

    Closing the thread

  • What are options for applying non-inventory costs to production orders?

    We have a non-inventory costs that need to be assigned to product produced on production orders.  There are two processes -make-to-order and make-to-stock.
    Currently we use activity rates to apply labor and burden costs to our production.  We use separate cost centers where needed to ensure that we have sufficient granularity to our activity rates applied.
    We have a few specific issues where we need to understand the options for applying costs -
    1) We have freight and duty costs related to inbound raw material that we want to assign to our final product.  The amount assigned may be either a specific amount (or a specific amount per model), or a % of the total cost on that production order.
    2) We have material on the production order bill of material that is called out by quantity and we are using discrete backflush, however we have found there are issues with the accuracy of the quantities.  We want to have this product ordered using KANBAN (bin ordering) and have the value relieved from inventory when the bin is issued to production.  The cost on the production order is envisioned to be an average amount for the product - or an average amount by model.
    3) We want to have a portion of cost for production scrap included in the cost of each product produced. (similar to freight and duty).
    In all cases- the amount can change depending on analysis from accounting regarding freight and duty costs (these fluctuate depending on the cost savings we achieve with combined loads and depending on the amount of out of country sourcing), the scrap amount may change periodically depending on the initiatives to reduce scrap on the production floor, etc.
    We currently use three activity types, labor, burden and tooling.  It is my understanding that there is a limitation in SAP that keeps us limited to 6 activity types.
    My questions are:
    Are we limited on activity types? these are an option to apply additional costs, but may not be the best option if we want to change the amount applied based on model or apply as a percentage.
    Are there other options for applying costs that we can explore? I want to be sure we take into account the various options available before we start down a specific path.
    Thank you in advance for your assistance.

    As clarification- we are using standard costing for our raw material.  We currently accumulate the incoming freight in a balance sheet account.  This is treated as part of our inventory.  We have considered using an activity type with a activity added to the BOM to apply the cost to the production order.  Then we could use the secondarly cost element data to book an entry to relieve the freight account on the balance sheet.
    Because we use standard costing- access to see production order variance is critical and must be maintained in any process we select. We also use COPA reporting- so the costing information must be able to flow to COPA for the specific orders/products/serial numbers.
    We are doing make to order (production order / sales order specific combination) but also looking at a make to stock process - so the method to apply costs must take both of these configurations into consideration.
    Rajneesh - you mentioned that I am limited to 6 activities in a work center- but does that mean I can have more than 6 activity types in SAP but only 6 activities in a work center/cost center combination?
    Thank you.

  • Doubt about the settlement rule of the Production ORder

    The only default distribution rule allowed for a PP order is PP1 or PP2.  We would need to change that to allow settlement to multiple receivers as a default. If that is the case, we may want to look into a user exit to update the settlement rule during production order creation instead so that the G/L account is correct from the beginning.
    Currently when we create the production order, the settlement rule will default the below, I am not sure if a user exit is able to maintain the Source as 200 (Materials)?
    If yes, we can then add the second rule for Source 100 (Labor and Mfg) via the user exit as well.
    In this case, SAP will not prompt us error of settlement with 200%, as they are from difference Sources.
    now anybody can explain me about the User EXit we have to correct this

    any help on this.. please its very urgent
    thanks in advance

  • How to track costing in Production order

    Hello Everyone
    I would like to get some details about how to set the product costs for Finished Goods and also how to track the expenses like packaging, labor, electricity, other charges etc, for individual production order.
    I have created the labor and packaging as a non inventory item and have used it in the BOM, now after the production order is closed, i find these two costs to be in the Actual Additional costs as shown below, till this is great.   
    But the requirement was, when they want to view the expenses or a month, then they require individual split up of costs against each production order. Is this even feasible?
    Please require help from you guys.
    Appreciate your help in this regard.
    Thank You

    Product Costing
    The cost of a FIFO or moving-average product is the sum of its component costs and additional costs (such as labor and overhead). To ensure accurate calculations of product cost, even if the components were issued manually, SAP Business One uses the cost of the items issued to production order and not the cost of the items currently in inventory. This avoids differences between the actual cost of components used in the order and the value of the product.
    Note
    The cost calculation method described here is relevant only for standard and special production orders, but not for disassembly for companies managing perpetual inventory.
    In the case of disassembly the components enter the inventory with the same cost as the items currently there. If the component is managed by FIFO, the cost of the oldest layer is used.
    The cost of returned components does not change; it is the cost of the last one that was issued.
    The product cost calculation is determined by the item management method.
    Standard – When the product is managed by standard cost, no calculation is made, and the cost is copied from the item master data upon report completion.
    Moving Average – When the product is managed by moving average, two figures are required for product receipt into inventory: receipt quantity and total value added to the inventory. The total value is the product cost, which is the sum of all component costs used for those products.
    FIFO – When the product is managed by FIFO, each report completion opens a new cost layer for the product in the inventory. The quantity in the layer is the quantity of the products just reported as completed. The cost of the products is the sum of all component costs used for the completed products divided by the quantity of the products.
    On every report completion, the system checks the following three quantities for each manually issued component:
    Issued Quantity – The quantity already issued to the production order.
    Used Quantity – The quantity already used for the completed products (completed products multiplied by the base quantity of the component).
    Needed Quantity – The quantity needed for the products that were just reported as completed (quantity of products reported as completed multiplied by the base quantity of the component).
    If the Used Quantity is greater than or equal to the Issued Quantity, this means that all items issued for the production order have already been used, and the Needed Quantity is yet to be reported as issued from the warehouse. Since the cost of the items that were actually used for the products is unknown, SAP Business One takes the current prices from the inventory.
    If the Issued Quantity is greater than the Used Quantity, SAP Business One finds the cost of the components that were issued and not used, and uses them in the calculation of the product cost. When finding those components, the issuing order of the components is taken into account, meaning that the first components to be issued are the first to be used. The components following those that were used are the first to be used for the cost calculation.
    If the sum of Needed Quantity and Used Quantity is greater than the Issued Quantity, meaning that not all needed quantity was issued, SAP Business One needs to make an assumption for those items’ costs, so it takes the current prices from the inventory.
    Upon the completion of a production order, on the Production Order Window: Summary Tab, you can check the product cost figures of the production order.
    Regards
    Kennedy

  • Looking For Standard SAP Report - Production Orders - Hours

    Is anyone aware of a standard report in SAP's PP module that shows labor hours in a planned vs. actual fashion?  The report that resides in a single production order via the menu path Goto -> Costs -> Analysis is great.  Our Plant Managers though need a report that allows people to view orders in summary across their plant.
    Thanks.

    All -
    I appreciate the suggestions.  I did try transactions S_ALR_87013127 and KRMI.  Here's what I found:
    - S_ALR_87013127 is good transaction our Plant Managers already use to see their performance on Plan vs. Actual for costs.  Unfortunately, hours are not included on the report.
    - KRMI is a transaction I had not used before.  I unfortunately couldn't get any actual line items to appear.

  • BOM explosion from Production Order

    Hi All,
      I understand from SAP Help files that we can explode BOM from Production Order using Read PP Master Data. But it also says, that we cannot do this if items have already been issued out. So would like to know is there anyway out to ensure that the production order is reading the latest version of BOM.
      The reason i want to know is because, at present the BOM keeps getting updated & so the work order has to reflect the new items. The BOM contains about 300 or more items, so manual changes is very tedious & error prone at the moment. Furthermore some components are outsourced. So i want to receive them back & post new materials for them. Hope my problem is clear & await inputs
    Vivek

    Hi All,
    Thanks for the inputs. I think for the situation am facing, the Order change management method, should be of help, as the BOM changes does not take place on scheduled dates, for me to fix the BOM explosion dates & assign them. As of now the BOM gets changed, depending the customer requirements, which is unpredictable.
    Clarification required:
    1. The profile which is created using OPL7 & assigned in OPL9 is unique, i.e. for any change numbers of BOM will always follow the profile entered in 'Overall Profile' in Work Scheduling view & i do not need to create new profiles for each new change number of BOM
    2. Once i run the COCM with the new change number, in the production order - components view will i be able to see any error message for those items which no longer feature in the new version of BOM? & will the materials added in the new BOM automatically feature in that list or do i have to manually add these to the order & if so, how will i know which materials need to be added?
      Hope the clarifications sought are clear, await inputs
    Vivek

  • Production order Target cost Zero - Varience calculation error KV151

    Hi Experts,
    I am having an issue on KKS2 variance calculation, system throwing error KV151 Target cost is 'Zero'
    All pre-requisites are ok including BOM, Rates, Routings etc..
    Process:
    Production order with FERT - valuated material,
    All BOM components in production order are Non valuated stock items, Non-stock items
    Note: Cost Estimat e is for Labor and Overhead only.
    After production order confirmation CO11N, production order Cost analysis displays - Target value ("Zero") and actual value.
    Due to above reason in KSS2 we are unable to calculate variance, system displayed error KV151.
    I cannot settle the production order, guide if I am missing some thing in config. ?
    I appreciate you quick response.
    Thanks,
    RK

    Thanks for your reply Swapvik & Takashi, I have no issues on configuration side very thing looks good.
    Cost estimate - Good
    Variance key - Good
    Production order - FERT (Valuated) - good
    BOM components - UNBW, NLGS only - Good
    Labor rates - good
    Periods - good
    Production order confirmation - Good
    Actual cost - Good
    My Issue is Target cost is zero on cost analysis in CO03 but if I can see target cost in KKBC_ORD report.
    I am unable to calculate variance and settlement.
    I appreciate your response.
    Thanks,
    Raj

  • Production order Confirmation Error

    Hi All,
    Need your help on a Issue we are facing. The user is trying to do confirmation using co11n. After entering the order number and operation the system is throwing the error below
    formula &1 for calculating work contains division by zero
    The &1 stand for a labor calculation formula. We have checked all the parameters defined in the formula and find that there is no divide by zeror issue in any prameter.
    This is the formula that is throwing the divide by zero error:
    Formula:            Setup Labor + (Labor / Eff. Factor * Op. qty./ Base qty.)
    Std Units:          H + (H/PROPOR * NoUnit/NoUnit)
    Std values:        0.00 +(0.00 /100 * 1.00/1.00)
    Any help in resolving this issue would be great.
    thanks and regards,
    sharath
    Edited by: sharath nelaturu on Sep 28, 2011 2:10 PM
    Edited by: sharath nelaturu on Sep 29, 2011 5:12 AM

    Dear,
    Kindly check routing for labor field. If you have maintained labor as standard value, you must have maintain any figure in routing.
    After maintaining labor field in routing, kindly re-read master data of production order.
    Check and revert back.
    Thanks
    Muhammad Ashfaq

  • CO Production Order month end closing and settlement question

    We are a utility without PP module.  We use CO Production Order to accumulate costs of assembling components (parts and labor) into a material number that we receipt into inventory.  We have questions about month end closing process and the settlement of these CO Production Orders when receipts are not complete or labor is not completely entered at month end.
    Basically we need to know how other non-manufacturing companies handle the settlement process.

    Hi,
    The Month end Activities are as follows
    Clearing the open items of vendor, customer
    Clearing the suspense account regularly
    All the Expenses Including the prepaid expenses have to be booked..
    Intercompany Balances Should be Zero
    Depreciation Run.
    Recuring Entries.
    Park documents to be posted(FBVO)
    Accural and referal in any differneces.
    GR/IR  Clearing Transaction  (Tcode-F.13)
    Bank Reconciliation(Comparing the Company Books and Bank Statements)
    Exchange rate to be updated
    Revaluation of foreign currencyopen items(F.05)
    Order Settlements.
    Distribution Cycle
    Assesment Cycle(KSU5)
    Transfer the Inventory to Profit center(1KEH)
    Match GL and PCA(KE5T)
    MM period Close and Open (Tcode MMVP)
    FI Period Open(Tcode OB52).
    CO period Closing
    Year End Process
    All the Month end Activities should be Carried Out.
    Balance Carried Forwarded to next year(F.16)
    PCA Balance Carried Forward(2KES).
    Carry forward the Vendor,Customer  and Asset Balances
    (Unless Dep is posted for all the months the assets can not be Closed)
    Copy the No Ranges to new year
    Open the Next  year period(OB52)
    I Hope this is Helpful,
    Assign the Points.
    Regards,
    Padma

Maybe you are looking for